Academics know they must keep up with the scholarly literature in their fields. However, when you're looking for a federal grant, there is another step you can take to ensure that you are not proposing a project the agency has already funded. By searching the agency's award database, you can see what it has recently supported. Results of these projects might not have made their way into the literature yet.
Here's an example of how to do it: Go to the National Science Foundation's award database.
Then do a search on keywords or the particular program you're applying to. Limit it by date so you are not swamped -- you're looking only for the newest awards. You will get an idea of what the agency has funded in the past in your area, and whether someone is already doing what you propose.