The Background Section. This section may not be necessary if the proposal is relatively simple and if the introduction can present the relevant background in a few sentences. If previous or related work must be discussed in some detail, however, or if the literature of the subject must be reviewed, a background or literature review section is desirable.
A background discussion of your own previous work usually can be less detailed than the customary "progress report." Here you should not attempt to account for time and money spent on previous grants but rather point your discussion to the proposed new (or continuing) research. Sufficient details should be given in this discussion (1) to make clear what the research problem is and exactly what has been accomplished; (2) to give evidence of your own competence in the field; and (3) to show why the previous work needs to be continued. Some sponsors want to know also who has funded the previous work.
Literature reviews should be selective and critical. Reviewers do not want to read through a voluminous working bibliography; they want to know the especially pertinent works and your evaluation of them. A list of works with no clear evidence that you have studied them and have opinions about them contributes almost nothing to the proposal.
Discussions of work done by others should therefore lead the reader to a clear impression of how you will be building upon what has already been done and how your work differs from theirs. It is important to establish what is original in your approach, what circumstances have changed since related work was done, or what is unique about the time and place of the proposed research.