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When Gov. Gavin Newsom announced Baby2Baby would manufacture and administer millions of escaped California co-branded diapers to each caller parent, helium claimed the deal "went done a competitory bidding process."
State records reveal it didn't.
California's official declaration database lists the $6.2 cardinal Baby2Baby woody arsenic "NON-COMPETITIVELY BID."
Baby2Baby is not alone.
Beyond #Diapergate: Investigation uncovers $1 cardinal successful California no-bid declaration exemptions by CBS LA on YouTube
CBS California Investigates recovered much than 2 twelve akin exemptions successful California's new authorities budget totaling much than $1 cardinal successful appropriations for programs ranging from a $253 cardinal opioid-response money to suicide-crisis grants to a $12.9 cardinal situation re-entry program. Two retired of 3 of the exemptions ne'er expire.
Because these deals are besides exempt from authorities contracting oversight, they are mostly hidden from nationalist presumption and don't look successful California's public database of no-bid contracts.
Had the politician not publicly announced the Baby2Baby contract, prompting questions astir the nonprofit's ties to Newsom and his wife, the "non-competitively bid" declaration whitethorn ne'er person been discovered.
That nationalist announcement, and the contention that followed, prompted CBS California Investigates to fact-check immoderate of the critics' claims.
- READ: California's "Diapergate": Critics got escaped diaper mathematics wrong, but authorities won't merchandise cardinal Baby2Baby records
- WATCH: "Diapergate": Fact-checking the outgo of California's escaped diapers. What they're not telling you.
As portion of that information check, we requested a transcript of the Baby2Baby declaration and competitory bid records done a California Public Records Act Request.
For 2 months, the medication delayed providing those records, prompting america to excavation deeper into authorities records that were already publically available.
After cross-referencing the state contract database, non-competitive bid database, two years of budget hearings and four different fund bills connected to Baby2Baby non-competitive contracts dating back to 2022, it became wide that this probe was nary longer astir diapers.
Key findings
- State records statement the Baby2Baby declaration as "NON-COMPETITIVELY BID", contempt the governor's nationalist statement of a "competitive bidding process."
- State law requires competitory bids, with a fewer ineligible exemptions. This declaration didn't spell done the mean exemption process, which requires justification and nationalist disclosure.
- Instead, an exemption was buried successful the authorities budget waiving competitory bidding, oversight by the authorities contracting watchdog, and the nationalist posting of no-bid contracts successful the DGS database.
- CBS California Investigates found more than 2 twelve akin exemptions successful the 2026 authorities fund totaling much than $1 cardinal successful appropriations. Those contracts are besides exempt from nationalist posting and third-party oversight.
- This is astatine slightest Baby2Baby's 3rd no-bid authorities contract. The first two listed Baby2Baby by sanction successful the budget, but neither appears successful the state's no-bid database.
- California is ne'er identified successful Baby2Baby's public taxation filings. Government grants look lone arsenic a azygous $2.5 cardinal enactment item, and the contributor docket is restricted from nationalist view, arsenic national instrumentality allows.
- The 2025 budget funded the escaped diaper programme astatine the disbursal of accepted diaper slope funding. The medication told lawmakers that diaper banks would beryllium capable to competitively bid for the contract.
- Instead of a competitory bid, the authorities issued a Request for Information, which is simply a papers that says, successful its ain good print, it's "Not a Solicitation." Fifteen organizations responded.
- Several respondents, including 1 of the nation's largest diaper slope networks, accidental they either didn't get an interrogation oregon felt they weren't earnestly considered.
- The state continues to hold releasing the diaper declaration and competitory bid scoring records to CBS California Investigates — present 66 days and counting.
"Non-competitively bid" — successful the state's ain words
California's declaration database introduction for the Baby2Baby woody is blunt. Acquisition method: "Exempt by Policy – Other (buyer indispensable bespeak policy) – NON-COMPETITIVELY BID."
Pressed to explicate the contradiction with the governor's announcement, a spokesperson said the word competitory "refers to the competitory nature" of the state's Request for Information, adding the exemption provided "flexibility to present connected the task astatine the standard needed to service Californians."
But astatine a May Senate fund hearing, the department's ain main lawman manager described what the exemption truly does: it "allows you to fundamentally prosecute successful negotiated contracting extracurricular of authorities rules," due to the fact that the ceremonial bid process "can beryllium cumbersome and clip consuming."
The mean mode to skip a bid — and what happened instead
Skipping a competitory bid isn't needfully improper. State rules allow a fistful of ineligible exemptions, including successful cases of an exigency declaration oregon for a merchandise that lone 1 institution makes. But that way comes with strings: agencies indispensable warrant the no-bid woody to the Department of General Services, and approved exemptions are publicly posted — 474 of them since 2018.
The diaper declaration took a antithetic way entirely.
One sentence, successful the 893-page budget
The Budget Act of 2025 contains a azygous proviso exempting Diaper Access Initiative contracts from the competitive bidding law, from public advertizing of the bid, and from "the reappraisal oregon support of immoderate part of the Department of General Services," the state's declaration watchdog.
No bid required. No watchdog review. No introduction successful the nationalist no-bid database. The lone nationalist trace: 1 coding enactment successful a declaration registry most Californians person ne'er heard of.
And here's however it got there. The governor proposed the escaped diaper programme successful his January 2025 budget, which ne'er described a competitory process, saying lone that the authorities would "identify a partner." The exemption itself appeared successful the fund measure successful precocious June. Three days later, it was law.
More than 2 twelve akin exemptions
CBS California Investigates searched the afloat 893-page 2026 Budget Act for the aforesaid exemption connection and recovered much than 2 twelve matching clauses crossed 7 authorities departments, each verified against the chaptered measure text.
Each waives some competitory bidding and DGS review.
They see a $253 cardinal opioid-response fund, grants supporting the 988 Suicide & Crisis Lifeline, and a $12.9 cardinal situation reentry program.
The exemptions besides screen funds implementing Proposition 1, the governor's signature intelligence wellness measure. That measure squeaked past voters 50.2% to 49.8% successful 2024. The borderline was truthful bladed that it took 15 days to call.
One clause gives the Office of Health Care Affordability, the state's ain health-cost watchdog, a no-bid authorization done 2031. The aforesaid fund point shields that office's report-related documents from the Public Records Act until 2031. It besides grants emergency-regulation powers that skip the mean nationalist rulemaking process.
Two-thirds of the exemptions ne'er expire.
A abstracted February measure applied a akin look to $90 cardinal successful reproductive wellness grants. The Governor's bureau says those funds went to Planned Parenthood and different clinics. What the property merchandise did not accidental is that those contracts, by law, "shall not beryllium made public." Lawmakers wrote findings into the measure to warrant the secrecy, citing the information of aesculapian providers and diligent privateness aft national defunding.
Baby2Baby's 3rd no-bid contract
This is astatine slightest the 3rd clip Baby2Baby has received authorities wealth without a competitory bid. But the earlier deals were done differently.
In 2022, lawmakers wrote Baby2Baby's sanction straight into the fund for a $1 cardinal car spot contract. In 2023, they did it again: $1.5 million, by name, for L.A. diaper distribution. Naming the vendor successful the instrumentality provided a level of transparency. Lawmakers saw who was getting the wealth and voted connected it.
But adjacent those "transparent" no-bid deals had unsighted spots. Neither declaration appears successful the state's no-bid database. Unless you searched the budget's hundreds of pages, you'd ne'er cognize they existed. And competitors ne'er had the accidental to bid connected those contracts either.
This time, there's nary sanction successful the instrumentality astatine all. The medication selected Baby2Baby done a process the politician called competitive. The records telephone it non-competitive.
Baby2Baby's ties to the authorities span the governor's tenure. He credits the nonprofit with bringing him the thought to destruct the diaper income tax. He suggests the escaped diaper program grew retired of conversations with the organization. And 1 of its co-CEOs sits connected the committee of the First Partner's California Partners Project.
Missing from the taxation filings, too
You can't hint the state's payments done Baby2Baby's public taxation filings either.
The nonprofit's astir caller 990 reports authorities grants arsenic a azygous enactment item: $2.5 million, with nary denotation of which governments paid. Federal instrumentality allows nonprofits to withhold the names of contributors, including authorities grantors, from the nationalist copies of their filings. Baby2Baby's contributor docket is marked "RESTRICTED." (The caller $6.2 cardinal diaper declaration began successful May and wouldn't look successful immoderate filing yet. The earlier state-funded deals can't beryllium identified successful the nationalist filings either.)
None of that is improper. It's however the disclosure rules work. But it means the lone papers that tin corroborate what California is paying Baby2Baby, and for what, is the declaration itself. The 1 the authorities won't release.
Diaper banks mislaid their backing and were promised a shot
The escaped diaper programme came astatine a outgo to California's existing diaper banks. The governor's 2025 fund connection eliminated their accepted backing and replaced it with the caller statewide program. When lawmakers asked what would hap to them, authorities officials said astatine a fund hearing that the diaper banks would beryllium capable to bid.
No competitory bid process ever happened.
The legislature stepped successful instead. It restored reduced backing for eleven named diaper banks and nutrient banks successful the 2025 budget: $7.4 million. This year, lawmakers much than doubled it: $16.5 cardinal to the aforesaid eleven organizations for diaper and hitch distribution.
That means the diaper banks' allocation this twelvemonth is present larger than the $12.5 cardinal appropriated for the adjacent signifier of the Baby2Baby programme itself. The difference: the diaper banks are named successful the law, successful plain sight. The Baby2Baby declaration inactive isn't public.
"Not a Solicitation"
Instead of a bid, the authorities posted RFI #24-25068, a Request for Information seeking input "from diaper manufacturers." The papers itself accidental it is "Not a Solicitation," clarifying it was issued "for accusation and readying purposes only." Responses "cannot beryllium accepted... to signifier a binding contract." Any pricing "will not beryllium considered a proposal/bid."
Fifteen organizations responded. The section said it evaluated them, interviewed some, and negotiated a declaration with Baby2Baby. HCAI Director Elizabeth Landsberg told senators it "was a robust, meaningful process," the aforesaid attack utilized for the state's CalRx insulin and naloxone programs.
Here's what the authorities hasn't explained: what did the "bid scoring sheets" it promised to merchandise really score? The RFI published nary valuation criteria.
"We weren't earnestly considered"
While diaper banks were encouraged to apply, CBS California Investigates spoke with respective respondents who accidental they either weren't fixed an interrogation oregon did not consciousness they were earnestly considered.
One of the nation's largest diaper slope networks told CBS California it responded to the RFI and ne'er got an interview. When they inquired, they were told determination were nary updates.
Several applicants said they lone learned they were retired of the moving erstwhile the politician announced the Baby2Baby concern astatine the May property conference.
Under a accepted competitory bid, losing bidders are notified. They tin petition the scoring sheets. They can protest. Under this process, determination was ne'er legally a bid oregon scoring criteria truthful determination was thing to protest.
Still waiting: 66 days and counting
CBS California Investigates requested the declaration and bid records connected May 12, 4 days aft the governor's announcement. The authorities took 24 days to corroborate that the records are public and disclosable. Then it delayed accumulation 3 times. The latest hold came astatine 5:09 p.m. connected July 3, a authorities holiday.
To beryllium clear, our fact-check found Baby2Baby is simply a highly rated charity. Its newest filing shows the co-CEO earning nether $70,000 a twelvemonth and personage committee members gain nothing.
Every exemption described successful this communicative is legal, approved by the Legislature.
However, the question is bigger than diapers. Should the authorities beryllium exempting much than a cardinal dollars successful contracts from competitory bids and nationalist oversight? And if the politician hadn't called this 1 competitive, would anyone person ever checked?
Neither the Governor's bureau nor Baby2Baby replied to our petition for comment.
We've besides asked the governor's bureau what criteria the 15 respondents were scored against, and whether the others were ever notified. We're inactive waiting for those answers, too.
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