Front sight on the DOE Courier gun was originally designed as a fixed front sight post that had a shield around it to prevent it from snagging, as it was designed to be carried both tactically (i.e. combat ready in a sling) or within a small, discrete over the shoulder bag. Some of the first test models would snag coming out of the prototype bags made by Eagle Industries and DeSantis Holsters (who made a special case for the US Secret Service also). One of the test models then was fabricated with a folding front sight, and a built in hand strap, like on the old Ithaca Stake Out shotguns.
Also, at the time it was designed, mid 1980's, DOE and its Security Types, was reliant on new equipment trends and it was envisioned to be used with both iron sights and with a electronic dot sight, like the old Amipoint 3000 and 5000 models. To prevent any sighting issues, the folding sight was found to give the best performance in all environments (close range and midrange).
Oddly, out of the original design request, DOE mostly bought M16 carbines, and full size 9mm SMGs and very few of the DOE length short carbines were bought by them. DEA tested them also, but went with the longer barrel when they purchased the 635 SMG in 1988 or so. The US Marshals purchased the most of the DOE model, but the standard rifle for them was the M16 carbine, and their standard SMG was the Mini Uzi at the time.
In the mid 1980's I trained extensively at the US Secret Service Center in Maryland, and got to fire tens of thousands of rounds a week on their ranges. When I got to go through their gun lockers, I found only one DOE model SMG and one Full size 9mm Colt SMG. I was told by their head weps Agent that USSS management went ahead and ordered more UZI SMGs for their field agents, and IMI was designing a new Uzi with ambi selectors, a polygonal barrel in 9mm and close bolt operations (can you say MP5)...........................IMI was pushing the Mini Uzi, since it was in production, but the USSS found it had too high a rate of fire to be safe in crowds. The Colt SMG was liked for having the same operational qualities as the Military issued weapons, but they were not too hot on them since there was a problem with mags, that was later worked out (first mags had normal follower, but later mags had a "M" stamped on the bottom and had a follower with a raised bump to position the rounds properly into the chamber. I later found out from a friend at Colt that the early SMG and Courier guns broke both the trigger and hammer pins, along with the bolt counterweight pins with alarming frequency. All were changed to Stainless pins and a double roll pin for the bolt. Bolt ramping also helped the system to be more durable.
The best model, in my opinion, was the 635 suppressed model, which Colt designed for the DEA's Clandestine Lab Teams (CLET). It was a 5 inch barrel with ports and a silencer built around it, with a standard M16A2 handguard over top of that. It was super silent (more than the already silent MP5SD), but it still gave off flame in the ejection port - so they experimented with other techniques and equipment with that DEA only problem.
added 8/23/14:
What people today do not seem to understand is that the late Max Atchisson, designed a 9mm SMG version of the M16 back in the early 1970's as a "drop on"kit for the Colt System. He tried offering it to Colt and then through a couple different companies that he did design work for.....but no one was interested. At the time, the Uzi was battle proven and sold worldwide and the Beretta 12 was being upgraded into the 12S model. Here in the USA, Cops either still had Thompsons as their go to SMG or they had surplus M3 greasers from the Army or Class 3'. The Colt company sold all their excess 639 and 649 carbines (11.5 inchers) to cops that wanted shorter firepower and did not want pistol caliber weapons. I guess Colt did not see a market in the 9mm AR/M16 platform until 10 plus year later. Max Atchisson also built two types of suppressed 9mm uppers for his design. One has a suppressed barrel and the other was a combination suppressed barrel with MAC10 style muzzle suppressor. Never fired one, but was shown both prototypes in the late 1970's at Max's contractor in Dayton, Ohio - who was making his select fire M16 subcaliber unit. The system looked crude, but like any prototype would look like. It also used a modified Uzi mag also.
Long winded, but hopefully answered your question.