(ngModelChange)="vendorUpdate(vendor)"

vendorUpdate(vendor){
     this.selectedVendor = vendor.small;
}

<md-select id="vendorVariable" class="vm-select-wrap" [(ngModel)]="selectedVendor" placeholder="AWS" name="vendorVariable">
  <md-option *ngFor="let vendor of vendors" [value]="vendor.small">
    {{vendor.caps}}
  </md-option>
</md-select>