It is my understanding that GSA schedule contracts and orders at to be used to buy commercial items on commercial terms.

Is that correct?

If so, how is it that orders are allowed to contain non-commercial terms?  I have government unique security requirements in mind, but anything unique to the government would seem to apply.

41 minutes ago, lotus said:

It is my understanding that GSA schedule contracts and orders at to be used to buy commercial items on commercial terms.

Is that correct?

Yes, see FAR 8.402(a).

42 minutes ago, lotus said:

If so, how is it that orders are allowed to contain non-commercial terms?  I have government unique security requirements in mind, but anything unique to the government would seem to apply.

Items can be added to a FSS order that might be non-commercial but see 8.402(f) as generally speaking doing so requires several steps/decision points regarding competition, set aside, etc. because such an item is considered to be "open market".