Our new lab puppy is 9 weeks old and weighs 12 pounds. His head is very small and his legs are short compared to his body. He is from a large litter of 10 puppies. Is it normal for puppies to vary in size at this age due to the size of litter? I am wondering if he is not what they said he was and if he has another breed in him.

Yes it is normal for puppies to be varying sizes, especially in larger breeds. 12 pounds sounds a pretty good weight for a 9 week old but you could check with your vet if you have any concerns about his weight.
Perhaps you could post a photo so we could see if he 'looks' purebred. There is no way of truly knowing though :)

12 pounds sounds about right. How big are the paws at the end of the short legs? That's not always a reliable gauge, but stereotypes do come from somewhere.