Newsom’s “competitive bid” diaper deal wasn’t. California’s budget includes dozens of similar no-bid exemptions.
California's Budget Hides Dozens of No-Bid Contracts, Including Baby2Baby Diaper Deal
Newsom s competitive bid diaper deal - When Governor Gavin Newsom unveiled plans for Baby2Baby to produce and distribute millions of complimentary co-branded diapers to families welcoming newborns across California, he asserted that the arrangement "went through a competitive bidding process." Official state documentation tells a different story entirely.
California's comprehensive contract database categorizes the $6.2 million Baby2Baby agreement explicitly as "NON-COMPETITIVELY BID." This designation contradicts the governor's public statements and reveals a pattern that extends far beyond a single charitable partnership.
Extended Timeline of Record Releases
An update dated July 17, 2026, reveals that the state released the Baby2Baby contract merely hours after this investigation first went live. This timing came 66 days following CBS California Investigates' initial request for the document. During this extended period, the state also furnished responses from over a dozen organizations that had answered its Request for Information.
Among those respondents was Amazon, which suggested allowing families to select and order only the diaper sizes they required, with direct home delivery. The Health Care Access Information (HCAI) organization contributed a "Finalists Recommendation" report, noting that it "met with all RFI respondents or organizations representing RFI respondents." However, at least one participant—a member of one of the country's largest diaper bank networks—contended it never received a meeting invitation.
Within thirty minutes of receiving these records, the governor's office transmitted a comprehensive email to CBS California Investigates addressing the investigation's findings. The news organization confirmed it was reviewing both the records and the official response, with plans to publish additional updates. One clarification has already been incorporated into the "Key Findings" section.
A Broader Pattern of Budget Exemptions
CBS California Investigates identified more than two dozen comparable exemptions embedded within California's new state budget. These provisions collectively encompass over $1 billion in appropriations across diverse programs. The scope ranges from a $253 million opioid-response fund to suicide-crisis intervention grants and a $12.9 million prison re-entry initiative.
Remarkably, two out of every three of these exemptions carry no expiration date. Because these agreements bypass standard state contracting oversight mechanisms, they remain largely invisible to public scrutiny and fail to appear in California's publicly accessible database of no-bid contracts.
Had the governor not made a public announcement regarding the Baby2Baby contract—thereby sparking questions about the nonprofit's connections to Newsom and his wife—the "non-competitively bid" designation might never have surfaced. That announcement, coupled with the ensuing controversy, motivated CBS California Investigates to systematically verify several critics' assertions.
Key Findings
State records classify the Baby2Baby contract as "NON-COMPETITIVELY BID," directly opposing the governor's characterization of a "competitive bidding process." Under California law, competitive bids are mandatory, though certain legal exemptions exist. This particular contract circumvented the standard exemption procedure, which normally requires formal justification and public disclosure.
Instead, an exemption was concealed within the state budget, effectively waiving competitive bidding requirements, oversight by the state contracting watchdog, and the mandatory public posting of no-bid contracts within the Department of General Services (DGS) database.
The investigation uncovered more than two dozen similar exemptions in the 2026 state budget, collectively representing over $1 billion in appropriations. These contracts similarly avoid public posting requirements and third-party oversight mechanisms.
This marks at least Baby2Baby's third no-bid state contract. While the first two agreements listed Baby2Baby by name within the budget documents, neither appears in the state's official no-bid database. Additionally, California does not appear in Baby2Baby's public tax filings. Government grants are recorded as a single $2.5 million line item, and the contributor schedule remains restricted from public access, as permitted under federal law.
Governor Newsom's 2025 budget funded the free diaper program by redirecting resources away from traditional diaper bank funding. Lawmakers subsequently amended these provisions, though the full implications of these changes continue to be examined.
"State records label the Baby2Baby contract as 'NON-COMPETITIVELY BID', despite the governor's public description of a 'competitive bidding process.'" — CBS California Investigates
The investigation ultimately revealed that this matter transcended a simple diaper distribution agreement, exposing systemic issues within California's budgetary and contracting processes that warrant continued public attention and legislative scrutiny.