There are several requirements for you to get the proposal workflow up and running in Project Server 2010. I recently got an message to the proposal WF not initiating.
The funny thing is that there are no errors or workflows in the queue at this point. Finally I traced the issue. This happens when you don’t have any users in your project portfolio managers group. To add users to that,
1. Open project web app – Under settings Go to Server Settings – Under security click manage groups – click portfolio managers – under users make sure you have added the users as needed – ok and exit – Run the proposal WF and it should complete and take you to the proposal screen now