The federal hiring system is designed to be as fair as possible as often as possible. Of course it isn't perfect and often fails. But fair doesn't mean that it is entirely impersonal and void of subjectivity. In the competitive system, a LOT of people can make a BQ list. From ther (veterans issues aside) the manager can pick whomever he or she wants. Knowing people and having somebody vouch for you can make a huge difference.
Also fed attorney positions, which people on these boards seem particularly interested in, are an entirely separate process, with very few rules. I was offered a positions at another agency that was never even announced or competed at all. I knew the manager very well from various networking opportunities. He had a vacancy, and he just called me and asked me if I wanted the spot. So if you are talking about being a fed lawyer, networking can mean quite a bit.