California Gov. Gavin Newsom late Friday released the long-requested contract behind the state’s controversial no-bid diaper program, making public an agreement with a nonprofit connected to his wife after months of pressure from reporters seeking access to the records.
The California Department of Health Care Access and Information posted the $6.2 million contract with Baby2Baby, offering the first detailed look at the taxpayer-funded arrangement.
Under the deal, Baby2Baby — whose CEO serves on the board of a charity founded by Jennifer Siebel Newsom — was chosen to supply 400 free diapers for each newborn delivered at participating hospitals across California.
In its release, the department detailed and defended the decision to select Baby2Baby, even as ethics watchdogs have called for an audit of how the contract was awarded.
“The Newsom administration has been misleading about whether the contract was awarded in a competitive process and has mired the entire situation with a complete lack of transparency,” said Kendra Arnold, executive director of the Washington, DC-based Foundation for Accountability and Civic Trust.
The department said in its Friday posting that Baby2Baby stood out because of its statewide distribution abilities, relationships with more than 590 California organizations, purchasing capacity and readiness to quickly build a hospital-based diaper distribution network across the state.
According to the department, officials began with a “request for information,” received responses from 15 organizations and chose Baby2Baby following an “evaluation process” applied to all respondents.
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Critics, however, argue the arrangement carries the appearance of political favoritism, particularly after the diaper nonprofit received a $12.5 million contract extension into next year. State records described the agreement as “non-competitively bid,” CBS reported.
The first-year $6.2 million contract laid out the terms and scope of the deal. It also disclosed how exactly the money will be spent.
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More than half of the contract, at $3.89 million, goes to actually getting the diapers with “Golden State Start” branding. About $750,000 will be spent on shipping the diapers and $610,000 goes to warehousing them.
In total, the cost for each diaper amounts to up to 12.5 cents per diaper.
An additional $35,000 is spent on “communications,” while labor costs take up the rest at $917,000. There are 12 employees working the program, meaning salaries from the deal would average to a little more than $78,000 per person.
Republicans are continuing to criticize the deal. State Sen. Roger Niello argued that running the program through a nonprofit — instead of having the government or hospitals buying the diapers directly — is an odd strategy if the goal is to keep costs low.
”They’re going through a middleman, a nonprofit, and that’s going to have administrative expenses,” Niello said.
