It's something of a crapshoot, a lottery, although that makes it sound only as if it were a matter of luck. In one respect, there is indeed an element of fortune. For the NEA (if the system of evaluation hasn't changed over the years), the submissions are divided up among groups of readers for first evaluation. A good deal of your luck there is contingent upon which set of readers your poems are assigned to: the wrong group early, and you have no shot. But if your poems make it into the second round, your work is considered by all the readers. That's actually a fair system, despite some of the arbitrariness.
In Florida, all the readers evaluate all the submissions. On one hand, that is extraordinarily fair. To get into the final round, your submission has to achieve an average score of "8" out of "10." But on the other hand, this is where the system of averages can be skewed by a single judge, who might deliberately give all the submissions he or she doesn't value a low score of "0" or "1." With the panels consisting of only five judges, that kind of skewing would prevent a submission that got "9" from each of the other judges from going into the next round--this is why in much of Olympic scoring the high and low marks are tossed out.
In any event, submitting for fellowships reminds me most of submitting writing samples for graduate school applications--where you regard not the communication and dynamics between poems as you would for a book manuscript, but the quality of poems and what they reveal about your aesthetics and abilities. Do you opt for depth of style, showcasing your strength in narrative? Do you bring together a unified sequence to demonstrate cohesion? Do you choose to show the eclecticism of your tastes in subject matter? Do you decide to showcase your ability to work in closed forms?
Obviously, you send your "best" work, but for me, that's such a slippery idea, and honestly these days, about the only time I genuinely make that consideration, group poems by their "quality," is when I put together a fellowship submission. That's where the grouping of the poems seems most haphazard. And even then, I have opted not to follow that criterion of quality.
Anyway, of course, I hope to win, and it's a shock and surprise when it does come my way--even moreso than a book acceptance. Is it the money, those pennies from the poetry gods? Yup. But it's also because the poems serve no other purpose but for that recognition (and the money is ultimately about time, but that's another issue). How odd when I compare that to why I write otherwise.
And what of the usual of not getting the money? I always eagerly read the list of fellowship grantees, and yes, I am most often Miss Congeniality, really happy for these poets because we so seldom get this kind of recognition, and sometimes I am Susan Lucci, wanting to kick the winner in the groin all the while I smile bravely.