Appropriate quality of test results is fundamental to the work of the medical laboratory. How to define the level of quality needed is a question that has been subject to much debate. Quality specifications have been defined based on criteria derived from the clinical applicability, validity of reference limits and reference change values, state-of-the-art performance, and other criteria, depending on the clinical application or technical characteristics of the measurement. Quality specifications are often expressed as the total error allowable (TEA) - the total amount of error that is medically, administratively, or legally acceptable. Following the TEA concept, bias and imprecision are combined into one number representing the "maximum allowable" error in the result. The commonly accepted method for calculation of the allowable error based on biological variation might, however, have room for improvement. In the present paper, we discuss common theories on the determination of quality specifications. A model is presented that combines the state-of-the-art with biological variation for the calculation of performance specifications. The validity of reference limits and reference change values are central to this model. The model applies to almost any test if biological variation can be defined. A pragmatic method for the design of internal quality control is presented.