Some research projects take a long time to get off the ground, if they ever even make it, and it can be difficult to keep everyone in a research group focused and motivated during the long (2-3+ year) time required to determine if some projects will be funded.
One project with which I am involved is so far doing OK in the protracted process required for this type of large project, but it is too early to tell if it will ever be funded. We survived a pre-proposal and one round of proposal review, and are gearing up for another round in the coming year. These types of large proposals are never funded the first year, so I expected this to be a long and arduous process.
The research group is quite large and multi/inter-disciplinary, and is also very international. At the outset, I told everyone in the group that the proposal would not be funded the first time, and it would take a minimum of 2 years to get it funded, and of course there is always a (good) change it might never funded.
The US researchers were all familiar with this and accepted the reality of the long march to (uncertain) funding. What I didn't expect, however, was that some of our international colleagues didn't really believe that a rejected proposal would ever be funded.
One colleague who is in the UK system told me that he can only submit a proposal for a particular project once; if the project isn't funded after one round of review, the project is dead. He therefore viewed any proposal not funded the first time as somehow damaged and unlikely to get funding. A few other researchers in other countries were similarly skeptical, and were unsure whether it was worth their time to continue as part of the research team.
I can understand their skepticism. This system is not very efficient and it's hard to see a rejection of a proposal as a step forward, but rejection is commonly part of the funding process. I think that part of the philosophy behind the protracted process, especially for large, multi-interdisciplinary proposals, is to maximize the chances that the research teams will function well and optimize the use of grant money. The proposal with which I am involved has definitely benefited from the various review stages.
At some point, though, the length of time to get (possibly) funded has a negative effect on the timeliness of the research objectives and on the ability of the research team to maintain cohesion. Furthermore, it is difficult to write the project to involve specific postdocs or graduate students when the time frame of the process is so protracted. For these reasons, the long time frame of the review process decreases that chances that the research will be as good as it would have been if funded the first time.
In the meantime, I am trying to keep a large research team together and keep the proposal process alive for a bit longer because I think it will be worth it to try again. Beyond that, however, I'm not sure it will be worth it, even though some groups get funded after 3+ years of effort. In this case, however, I think the research ideas wouldn't be very fresh after that amount of time, and it would be better to try something else.
Of course I am hoping that I won't have to make that decision. At least for me, delusion is essential to the proposal-writing process.