Green Beret to the SeaBee=Can you walk?
SeaBee to Geen Beret=Stand me up and I can run.
I would think that quote means that the VC has infiltrated every level of the South Vietnam government, which they had. Speaking of the movie, at nineteen minutes into the film that is me taxiing the C130 into Danang (really Pope AFB, NC). I was stationed at Charleston AFB, SC and they sent an aircraft up there for the film. I was surprised how old the major actors were. The crew was given Zippo lighters inscribed "The Green Berets" and "Stolen from John Wayne."
That line illustrates the problem with the whole "Vietnam War" idea -- we went in with the Western idea of building a government for the good of the people but their whole culture was based on what was best for themselves/their family at the immediate time. With little commitment to the "national government" the local people would "go with the flow" and cooperate with whoever had the big stick at the moment.
This was further exacerbated by the "Fire base" strategy (defending strong points and patrolling around them) instead of a "fixed front" strategy like we used in Korea/WWII/etc when we pushed a line into the enemy territory and sanitized it.
Yeah, even my ROTC instructors knew it was a stupid strategy.