[suhb-greyd] Civil Engineering, Building Trades.
the prepared earth surface on which a pavement or the ballast of a railroad track is placed or upon which the foundation of a structure is built.
beneath the finished ground level of a project.

1895–1900; sub- + grade Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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World English Dictionary
subgrade (ˈsʌbˌɡreɪd)
the ground beneath a roadway or pavement

Collins English Dictionary - Complete & Unabridged 10th Edition
2009 © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins
Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009
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Example sentences
Subgrade soils are prepared and compacted before the placement of subbase
  and/or base layers.
The base and subgrade conditions also play a significant role in performance.
The subgrade shall be clean of loose or wet material prior to placing concrete.
Unsuitable subgrade soils shall be excavated to a depth sufficient to produce a
  stable bearing surface for pavement subgrade.
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