The Specifications chapter should itemize design goals for your project. Your spec's should contain your engineering interpretation of the 'level 1' requirements that you negotiated with your sponsor. These specifications should appear as numerical entries wherever possible. You'll use these specs to assist you in evaluating alternative solutions against each other, and hard values and numbers make this evaluation step possible.
The chapter format is to be concise and to-the-point: Consider bulleted lists or tables of specs backed up by explanatory paragraphs - if necessary - to justify inclusion of certain non-obvious items. With the use of bullets or tables this chapter is typically among the shortest in a report, but ranks as one of the most important from the standpoint of providing clear targets for achievement.