Wash potatoes; peel and cut into eighths. Place potatoes in a large cooking pot and cover with water. Bring to a boil and cook for 10 min.
While potatoes are boiling, mix together flour, sugar, salt, pepper, and celery seed. in a 2 cup measuring cup, mix the water and vinegar.
Drain potatoes, place back in cooking pot; set aside.
In a large skillet, fry bacon until crisp; remove and drain. cook and stir onion in bacon drippings until tender and golden brown. stir in flour mixture. Cook over low heat stirring until bubbly. Remove from heat; stir in water and vinegar. Heat to boiling, stirring constantly.
Add kielbasa or smokies. Boil and stir 1 min. Crumble bacon over potatoes; pour meat mixture over potatoes and bacon. Stir until well coated.