Actually, I know they do this. Or, I should say, I know that some manufacturers (not necessarily Glock) do this.
PDs will contract with manufacturers for a number of years and/or number of guns. Once that contract expires, the PD might be charged the same rate for another order of new guns, or they might not...depending on the economy, the size of the order, changes in manufacturing (does the company still make the gun in question?), etc etc etc. If the cost per unit was profitable for the manufacturer, they might quote the same price. Or, like my department (non-Glock), they might be quoted something much higher.
Regardless of the amount and reason why, once the PD is presented with the new price, they have two choices:
A. Pay it.
B. Buy somewhere else, with all of the additional costs and problems that entails (like either dealing with two different models of sidearm in your armory, or re-gunning the whole department).
There are, of course, other manners of wheeling and dealing going on in there, too. Gun trades (Send us your busted oldness, we'll send you our new sweetness, one for one), offers to provide free holsters, magazine deals, ammo deals, customer service deals, etc etc etc. But the bottom line is that once a manufacturer has a PD as a client, they know that it is often a real PITA and expense for them to switch to another vendor. I'm NOT saying that they gouge the prices (because that would be bad press, and bad press hurts sales), but they will often not give as sweet a deal for follow-on orders as they did to get their foot in the door.
Mike