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Nowadays, more researchers in the simulation field are interested in the use of a service-oriented architecture and component-based system in order to design more efficient large-scale distributed simulation systems. A Service-Oriented Architecture (SOA) is a collection of independent services with well-defined interfaces that can be accessed without knowledge of their implementation. A component-based approach separates the whole system into different parts based on their functionalities. In this paper, a framework for component-based distributed simulation on the Grid (SOAr-DSGrid) is introduced. One of the major issues in designing the framework is to have efficient data flow and control flow in the framework. Data flow describes the way that data moves in the system while control flow determines the order of activities that happen in the system. The rule engine is a critical part of the framework and is responsible for managing the distributed data flow and control flow. The design and implementation of the rule engine is the major focus of this paper. The rule engine enables the framework to be more scalable as the components within the framework now communicate in a fully distributed manner.