Preheat the oven to 375°F (190°C).
Heat 1 tablespoon of olive oil in a large skillet over medium-high heat.
Add the diced onion and cook for 3 minutes until softened.
Add the diced green and red bell peppers and cook for an additional 4 minutes until tender.
Push the vegetables to the side of the skillet and add the ground beef.
Season the ground beef with salt, black pepper, garlic powder, onion powder, and smoked paprika.
Cook the ground beef, breaking it up with a spoon, until browned and cooked through, about 7-8 minutes.
Drain any excess fat from the skillet and mix the vegetables and beef together.
In a large mixing bowl, combine the thawed diced potatoes O’Brien, sour cream, milk, and remaining 1 tablespoon olive oil. Stir until well combined.
Add the cooked ground beef and vegetable mixture to the potatoes and stir to combine evenly.
Lightly grease a 9×13 inch casserole dish.
Spread half of the potato and beef mixture evenly into the casserole dish.
Sprinkle half of the shredded cheddar and Monterey Jack cheeses over the layer.
Add the remaining potato and beef mixture on top and spread evenly.
Top with the remaining shredded cheeses.
Cover the casserole dish with aluminum foil and bake for 30 minutes.
Remove the foil and bake for an additional 15 minutes until the cheese is melted and bubbly and the casserole is heated through.
Remove from the oven and let the casserole rest for 5 minutes.
Garnish with chopped fresh parsley before serving.