Legal Definition:

US Code Title v § 2103.

(a) For the purpose of this title, the “excepted service” consists of those civil service positions which are not in the competitive service or the Senior Executive Service. (b) As used in other Acts of Congress, “unclassified civil service” or “unclassified service” means the “excepted service”.

Most federal government civilian positions are part of the competitive civil service, where applicants must compete with other applicants in open competition under the merit system administered by the Office of Personnel Management. However, some agencies are excluded from these provisions. Although they mainly work on a merit system also, they have their own hiring systems and evaluation criteria. These agencies are called "excepted service agencies" and their positions are part of the excepted civil service.

The principal excepted agencies are:

Agency for International Development 
Central Intelligence Agency  
Defense Intelligence Agency   
Dept. of State   
Federal Bureau of Investigation (FBI) 
Federal Reserve Board 
General Accounting Office 
National Security Agency 
Nuclear Regulatory Commission  
Postal Service  
Tennessee Valley Authority (TVA) 
Veterans Affairs Dept.