WSU just established a policy last fall for handling multiple submissions:

"In instances where WSU faculty and staff prepare competing grant
applications for submission to the same funding source program, which
formally prohibits or informally descourages submission of multiple
applications from a single institution, WSU will approve the submission of
only one of the applications.  Faculty and staff are encouraged to notify
the Grants Director of their intent to submit a grant application as soon as
they decide to do so.  As soon as the Grants Director becomes aware that
potentially competing applications are under preparation, the Director will
work with the applicants to facilitate preparation of a collaborative
proposal.  If such collaboration is not feasible due to proposal content
and/or time restraints, the Director will notify the appropriate Dean.  The
Deans' Council will recommend to the President which application will be
submitted."

We haven't used this policy to date, but having it on record (and publicized
to the faculty) means at least my office won't be put in the position of
making a last minute decision on which grant gets submitted.  I think it's
also a reminder that most grants are made to the institution, not the
individual (though I admit some agencies do not operate that way).
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Live long and prosper.   >:-I

Nancy Kay Peterson
Director of Grants
Somsen Hall, Room 202-C
Winona State University
Winona, MN  55987
Phone:  507/457-5519
FAX:    507/457-5586