Can the PI include references from work accomplished under previous NSF awards in the “literature cited” section?
No, as per the NSF Grant Proposal Guide http://www.nsf.gov/publications/pub_summ.jsp?ods_key=gpg, only references that are cited in the project text can be included in the literature cited. Publications resulting from previous NSF support should be cited within the project description under Results from Previous NSF Support or, if actually cited in the proposal, can be identified in the literature cited by asterisks or bold lettering.