Heat olive oil in a large pot over medium heat. Cook the bacon just until it starts to brown a bit, 5 to 8 minutes. Add the olive oil, onion, and bell pepper; cook and stir until vegetables begin to soften, about 5 minutes.
Stir in the garlic, tomatoes, sausage, and bay leaf; cook about 4 minutes. Add lentils and water (water should be about an inch deeper than the level of the lentils). Bring to a boil over high heat. Reduce heat to low; simmer, uncovered, until lentils are just cooked, 15 to 20 minutes.
Put the potatoes into the soup and continue simmering until potatoes are cooked through, 12 to 15 minutes.