You could hire an acoustician and treat your room for way less than $10K.
Look at RPG.
http://www.rpginc.com/
Read Floyd Toole's book, "Sound Reproduction: Loudspeakers and Rooms".
You need less room treatment than you might think, especially if you have speakers with good dispersion and smooth, linear off axis response.
That said, a 12x12 room will have significant problems. Hope you don't have a 12' ceiling. Look at a room mode calculator to see what frequencies will be emphasized.
Is your dealer doing any measurements to show before and after analysis? Small room acoustics is a science and just throwing stuff on the walls (and ceiling) does not guarantee good results. I treated a 16W x 23L x 10H home theater for about 1/2 what you are spending (just the absorption and diffusion panels, not including what I paid an acoustician to design the room and treatment).