HOULTON – Melton Sales and Service, a New Jersey firm that overhauls vehicles for the U.S. Department of Defense, still is interested in expanding its operations to Houlton.

That expansion, however, depends on whether the company can land a contract to overhaul as many as 9,000 military vehicles over the next eight to 10 years, as well as a firm commitment of financial assistance from the state.

Reached on Thursday at his office in Bordentown, N.J., John Melton, company president and chief executive officer, said he is using a team approach in his plans for Houlton.

He wants to form a partnership with the state, the Maine Army National Guard and the town to share in a larger Department of Defense contract.

The National Guard operates an overhaul facility at the Loring Commerce Centre in Limestone.

“We cannot be a competitor with the National Guard, as that would not work long-term for the state,” Melton said. “But we want to be an ally.”

Late last year, Melton had hoped to expand some operations to Houlton and then use that as an enticement to win a Department of Defense contract.

He said he now has found it necessary to first secure a contract in order to reduce the financial risk of the expansion.

Melton said he will be in Maine next month to meet with state officials about securing a financial commitment that will enable him to take the risk.

“My intention is good,” he said. “The project is doing very well, although it’s a completely different strategy.”

Last December, Melton anticipated it would take $2 million to get limited operations up and running in Houlton at the former Houlton International Corp. facilities at the town’s industrial park. That effort could have employed up to 40 people.

Houlton International, which closed last December, leased a town-owned, converted World War II hangar at the industrial park, and also owned some smaller buildings to make hardwood furniture components.

Now, Melton said, he will need $15 million but that investment carries with it the chance to win a contract worth nearly $220 million over eight years, and the potential to employ 150 to 200 people.

He said he wants to have a secure, long-term operation in Houlton.

“I don’t want to be there four years or eight years and then pull out and have 150 [people] unemployed again,” he said.

Melton estimated that his company so far has spent at least $100,000 on the project.

Houlton Town Manager Peggy Daigle said Wednesday she still was optimistic about the project and its potential for the town.

“It’s still a very good project,” she said, adding that it was a different direction for the town, which moves away from the more traditional reliance on natural-resource-based businesses.

According to a memorandum of understanding drafted by the town in January, Melton would take over all buildings and leases now held by Houlton International. Melton then would transfer ownership of the property to the town, which would lease it back to Melton.

The company would lease the facility from the town for 10 years with a 10-year renewal and purchase option.

Melton has not yet signed the agreement.

The town has lined up a $400,000 Community Development Block Grant from the state, has secured a promise for a $500,000 loan from the Maine Rural Development Authority and is prepared to borrow money to get the project moving.

The problem, Daigle said, is that the town needs to act to make sure the hangar remains usable for any potential tenant.

“We need to do whatever so that the town can be responsive later on to something going in there, whether it’s Melton or someone else,” she said. “We’ve almost got to have a turnkey operation.”