Preheat the oven to 350 degrees Fahrenheit. Place bacon strips in a single layer on a baking sheet lined with parchment paper or aluminum foil. Bake for 20 minutes, flipping once halfway through. The bacon should be crispy and golden brown when finished.
Heat a large skillet over medium heat and add the diced green pepper and onion. Cook for 7 minutes, stirring occasionally until the vegetables are softened.
Add the bacon strips to the skillet and cook for 2 minutes more. Sprinkle the flour over the contents of the skillet, stir well, and cook for an additional 3-4 minutes.
Slowly pour in the milk and stir until the mixture thickens slightly.
Add salt and pepper to taste. Serve with your favorite sides or as an accompaniment to eggs, toast, or pancakes.