This sounds like a blast to me.
I think the fact that you give up the bike you are building is an ingenious aspect as it motivates people to do things on the cheap, where time is the best thing invested. Knowledge learned over money spent.
That being said, I love the debate of parts and whats allowed in regards to bikes, when the biggest advantage will be familiarity with the route. Knowing the traffic patterns, habit of drivers, how long a light stays red, which cross streets are one way, do the walk signals relate to how soon the light turns red and does that vary from one intersections to another. And those are all just things you can take advantage of while abiding by the rules of the road.
Sure top speed and take off is great, but if you know the above items you can maintain a higher average speed.
Honestly, best advantage goes to the locals, but I am interested none the less.