Preheat oven to 350 degrees F (175 degrees C). Spray the inside of a fluted tube pan (such as Bundt®) with cooking spray.

Combine 4 cups flour, baking powder, and salt together in the bowl of a stand mixer. Add 2 1/2 cups sugar, 2 cups softened butter, milk, eggs, and 1 1/2 teaspoons vanilla extract to flour mixture; lightly stir with a spatula to moisten ingredients. Mix on low speed until batter is evenly combined, about 3 minutes.

Toss candy bar pieces with remaining 1 tablespoon flour in a bowl until coated; fold into batter. Spread batter into the prepared pan.

Bake in the preheated oven until a toothpick inserted in the cake comes out moist with crumbs clinging, about 1 hour. Cool in pan for 25 minutes; remove from pan and cool completely on a wire rack.

Combine 1/4 cup white sugar, evaporated milk, 1/4 cup butter, chocolate chips, and 1/2 teaspoon vanilla extract together in a saucepan; bring to a boil, stirring constantly. Reduce heat and simmer until frosting is thickened, about 5 minutes. Pour frosting over cake.