in the Competency framework, select the Add new competency framework, Add a competency, that is the parent.
Select the parent and then Add Competency, those are the children.
Competencies cannot be moved, so consider how you will work with these objects before you setup a large framework.
I recommended looking at your scales before you start adding competencies. Each competency requires a scale with a proficiency (default) value. I also recommend that you only use Scales with values that do not include, Not Rated or Not Yet Competent, Scales cannot be changes once the competency is awarded to a student. Consider, how the different views look and what the student/instructors will see before you create your scale values.