Accuracy isn't the issue. A short barrel will impart less velocity on a bullet than a longer barrel (up to a point, anyway). And military ammo (M193 & M855) relies heavily on velocity to cause bullet fragmentation. Without bullet fragmentation, the bullet will only make a deep .22 caliber hole (with a slightly bigger section a few inches in where the bullet turns around and continues base first). The difference in wound severity between a bullet that fragments and one that doesn't is HUGE.
One solution is to use controlled expansion soft-point bullets that don't need such high velocity. These are much more expensive, and may not give you quite as large of a wound as a fragmenting bullet, but at least make a much larger wound than a non-expanding FMJ.
But, the better solution is to use a longer barrel, which will be more efficient with ANY ammo. Given that your barrel must be 16" in length, you're better off with as much of that being rifled barrel as possible. If you're looking for the shortest possible rifle, than a 14.5" barrel with permanent Phantom FS will give you much more usable velocity (and therefore range) with both military and SP ammo.
In your situation, I'd pick up a 1:9 Bushmaster M4 barrel with perm. Phantom and rebarrel that upper. If you send in your upper to Bushmaster and buy their barrel, they'll install it for you for free.
Read this: [url]www.ecis.com/~mraudio/AR15_Ammo_FAQ.htm[/url]
-Troy