Yes it does
I suppose the M16 has a very high muzzle velocity so the slug flies true.According to [link|http://www.hqmc.usmc.mil/factfile.nsf/7e931335d515626a8525628100676e0c/6a60172b3db3d5ce8525627b0062d928?OpenDocument|this][1]:
Maximum effective range:In their lexicon, "point target" means accurate enough for man-sized targets, "area target" means accurate enough for vehicles or clustered groups of personnel. The figures are also baseline for an "average" rifle. It is possible to "tune" one to be even better.
Area target: 2,624.8 feet (800 meters)
Point target: 1,804.5 feet (550 meters)
Muzzle velocity: 2,800 feet (853 meters) per second
In short, it's possible for a decent shooter with a M-16 and iron sights (ie: no scope) to score headshots from more than far enough away to escape identification. And the rounds recovered so far are .223 calibre, which works out to the M-16's 5.56mm. Think .22 slug in a high-power rifle casing. This design trades superior long-range accuracy for decreased stopping power.
[1] Blargh, what a great URL.
