Newsom's 'competitive bid' diaper deal was not competitive, records show

California Governor Gavin Newsom's administration awarded a $6.2 million contract to the nonprofit Baby2Baby for the manufacture and distribution of millions of free diapers. Newsom publicly stated the deal underwent a "competitive bidding process," but state records obtained by CBS California Investigates reveal the contract was classified as "NON-COMPETITIVELY BID."

Further investigation uncovered that this contract, along with more than two dozen similar exemptions in California's new state budget, totaling over $1 billion, bypassed standard competitive bidding and state contracting oversight. These exemptions cover a wide range of programs, including an opioid-response fund, suicide-crisis grants, and a prison re-entry program. Crucially, two out of every three of these exemptions do not have an expiration date, potentially allowing for indefinite non-competitive contracting.

The Baby2Baby contract, specifically, was not processed through the usual exemption procedure, which requires justification and public disclosure. Instead, an exemption was embedded within the state budget itself, effectively waiving competitive bidding requirements, oversight from the state contracting watchdog, and the public posting of these no-bid contracts in the official database.

This discovery came to light after the governor's public announcement of the Baby2Baby contract prompted scrutiny due to the nonprofit's ties to Newsom and his wife. The administration initially delayed providing the contract and related competitive bid records for two months in response to a Public Records Act request. This delay prompted CBS California Investigates to delve deeper into publicly available state records, cross-referencing contract databases, budget hearings, and budget bills dating back to 2022.