Probe Details How California's $6.2 Million Baby2Baby No-Bid Diaper Contract Was Structured
A CBS News probe published Wednesday, July 29, 2026, released 356 pages revealing how California structured a roughly $6.2 million no-bid diaper contract with Baby2Baby.[1]
The contract requires hospitals to give each newborn family 400 California-branded diapers in only Newborn and Size 1 at discharge, with no right to return or exchange sizes.[2] State Health Care Access and Information (HCAI) officials and rival applicants warned in writing that concentrating on infant sizes and sending 300-400 diapers at once could lead to waste and size-mismatch problems.[2] Internal HCAI records show a finalist, SupplyBank.org, offered more diapers in more sizes plus direct-to-consumer distribution, yet Baby2Baby was selected.[1] California delayed releasing the Baby2Baby contract and related records for 66 days; the 356-page file contains no bid scores and confirms the deal was exempt from the Public Contract Code, State Administrative Manual and Department of General Services review.[2]
State Health Care Access and Information initiated the effort with a Request for Information explicitly labeled "Not a Solicitation" and "for information and planning purposes only," though officials later described it to lawmakers as an RFP that was "evaluated and scored." CBS News State documents show the program was effectively designed around Baby2Baby's existing hospital-distribution model before the RFI was issued, and the final contract locks in that design.[1] The contract also requires oversight committee meetings to be "not open or public" and mandates coordinated messaging with mutually approved talking points between the state and Baby2Baby.[1]
Officials and Gov. Gavin Newsom cited a "competitive bid process" as the reason for the delayed records release, but the file contains no bid rankings or scores.[2] The executed contract originally cited a prescription-drug statute as the authority to bypass oversight; that citation was crossed out and replaced with a budget exemption eight days after CBS requested the records.[1]
Lawmakers nevertheless renewed both the diaper program and its contracting exemption for a second year despite the transparency and waste concerns revealed in the records.[1] Baby2Baby initially declined to name its diaper manufacturer; records now show the maker is in Mexico.[1]
The mainstream summary frames the Baby2Baby contract as a straightforward no-bid arrangement, but City Journal critiques this as part of a broader pattern of California's opaque budgeting practices that undermine competitive procurement. The author argues that such budgetary carve-outs are politically driven, effectively turning the state's financial processes into a vehicle for patronage and cronyism, which the summary does not address. Furthermore, while the summary mentions the lack of bid scores and rankings, it does not highlight the misleading nature of the state's claims of a competitive process, which the City Journal points out as a deception that obscures how taxpayer money is allocated.
Additionally, the summary overlooks the systemic issues surrounding these no-bid contracts, such as the absence of sunset clauses that could make these exemptions permanent, thereby eroding transparency and accountability over time. This critical perspective emphasizes that the Baby2Baby contract is not an isolated incident but rather indicative of a troubling trend in California's budgetary practices that warrants public scrutiny and reform.[3]
Show source details & analysis (3 sources)
📌 Key Facts
- The contract requires hospitals to give each newborn family 400 California-branded diapers in only Newborn and Size 1 at discharge, with no right to return or exchange sizes, a design repeatedly flagged as likely to create waste (400 California-branded diapers).
- State Health Care Access and Information (HCAI) officials and rival applicants warned in writing that concentrating on infant sizes and sending 300–400 diapers at once could lead to waste and size-mismatch problems (State Health Care Access and Information (HCAI) officials).
- Internal HCAI documents show a finalist, SupplyBank.org, proposed more diapers in more sizes and direct-to-consumer distribution, yet Baby2Baby was selected over that offer (SupplyBank.org).
- The initiative began with a Request for Information explicitly labeled 'Not a Solicitation' and 'for information and planning purposes only,' even though senior HCAI officials later described the process to lawmakers as an RFP whose proposals were 'evaluated and scored,' and the executed deal was confirmed exempt from the Public Contract Code, State Administrative Manual and Department of General Services review (Request for Information).
- California delayed releasing the Baby2Baby contract and related records for 66 days and then published a 356-page file that includes the executed contract, internal analyses, vendor proposals and emails (356 pages of records).
- State documents indicate the program was effectively designed around Baby2Baby’s existing hospital-distribution model before the RFI was issued, and the final contract 'locks in' that specific design (hospital-distribution model).
- The contract and program include nonpublic oversight: the oversight committee meetings are described as 'not open or public,' and the contract requires coordinated messaging and mutually approved talking points between the state and Baby2Baby (oversight committee meetings).
- Baby2Baby initially declined to name its diaper manufacturer; records now show the manufacturer is in Mexico, the executed contract originally cited a prescription-drug statute to bypass oversight (later crossed out and replaced with a budget exemption after CBS requested records), and lawmakers subsequently renewed both the diaper program and its contracting exemption for a second year (manufacturer is in Mexico).
📊 Analysis & Commentary (1)
"The City Journal piece critiques California’s use of buried budget carve‑outs and no‑bid exemptions (as revealed by a CBS News review), arguing the practice amounts to an opaque 'shakedown' that evades competitive procurement, misleads the public, and requires reforms like mandatory disclosure, sunset clauses, and restored oversight."
📰 Source Timeline (3)
Follow how coverage of this story developed over time
- California released 356 pages of records on the diaper program after a 66-day delay, including the executed Baby2Baby contract, internal analyses, vendor proposals, and emails.
- The records show Baby2Baby’s model of giving 400 diapers in only Newborn and Size 1 at hospital discharge, with no returns or exchanges, was repeatedly flagged by HCAI staff and applicants as likely to create waste but was nonetheless adopted without changes.
- The state designed the program around Baby2Baby’s existing hospital-distribution model before issuing the request for information, and the final contract “locks in” that specific design.
- HCAI’s final recommendation memo identified two finalists and documented that SupplyBank.org offered more diapers, in more sizes, plus direct-to-consumer distribution, yet Baby2Baby was selected.
- Other proposals offering greater flexibility, including an Amazon voucher plan allowing size choice, home delivery, and returns, do not appear in the comparison or finalist documents.
- Across the record set, state documents inconsistently report the number of respondents (11, 14, or 15), and at least one applicant says it submitted a response but never got a meeting.
- The contract requires taxpayers to pay for California-branded diapers, and internal records say a simpler design could reduce costs and that diaper quality could affect "the State's reputation."
- The program’s oversight committee meetings are expressly described as "not open or public," and the contract requires coordinated messaging and mutually approved talking points between the state and Baby2Baby.
- Baby2Baby declined to identify its diaper manufacturer during selection; records now show the manufacturer is in Mexico.
- The executed contract originally cited a prescription-drug statute as the authority to bypass oversight; that citation is crossed out and replaced with the budget exemption in a notation dated eight days after CBS requested the records.
- Despite transparency and waste concerns revealed in these records, lawmakers renewed both the diaper program and its contracting exemption for a second year.
- California’s contract with Baby2Baby for a roughly $6.2 million free-diaper program requires hospitals to give each newborn’s family 400 California-branded diapers limited to Newborn and Size 1 at discharge, with no right to return or exchange sizes.
- State Health Care Access and Information (HCAI) officials and rival applicants had warned in writing that concentrating on infant sizes and sending 300–400 diapers at once could lead to waste because babies quickly outgrow those sizes and parents may need larger sizes instead.
- Internal records show a competing finalist offered more diapers, in more sizes, and was identified by HCAI’s own final recommendation as ready to provide the direct‑to‑consumer component, yet Baby2Baby was selected.
- The state delayed releasing the Baby2Baby contract and related records for 66 days, with officials and Gov. Newsom citing a 'competitive bid process,' but the released 356-page file contains no bid scores or rankings and confirms the deal was exempt from the Public Contract Code, State Administrative Manual and Department of General Services review.
- The process was initiated with a 'Request for Information' explicitly labeled 'Not a Solicitation' and 'for information and planning purposes only,' even though senior HCAI officials described it to lawmakers in 2025 and May 2026 hearings as an 'RFP' whose proposals were 'evaluated and scored.'